At a poker game recently, I heard one of the saddest things I’ve encountered in a while: “$10 million is not enough to retire early.”
Mind you, we were all sitting in San Francisco, an expensive city, but also one of the cheapest international cities in the world. So I get it, context matters. But I couldn’t shake how genuinely depressing that statement was.
Nobody at the nine-person table disagreed. Only one person even questioned it before I stepped in and said what apparently needed to be said: $10 million is absolutely enough to retire early.
What struck me even more was that I’m fairly certain the majority of people at that table weren’t worth anywhere close to $10 million. Which made the whole thing sadder.
Can you imagine being 200 feet underwater, lungs burning, kicking and clawing your way to the surface, finally breaking through into beautiful fresh air, and then declaring it still isn’t enough? That’s a tragedy.
People Throw Out Big Numbers Without Doing The Math
Here’s what I think is happening. People hear “$10 million” and it sounds rich. It sounds like a number that buys you freedom. So they anchor to it without ever actually running the numbers. And because nobody around them pushes back, the myth just keeps growing. But because they also hear people with $20 million, $50 million, and $100+ million, they suddenly think $10 million is just not enough.
Let me push back.
If you have $10 million in investable assets today, you could park it in Treasury bills and generate roughly $460,000 a year in essentially risk-free, state-tax-free income.
Could a family of four live comfortably on $460,000 a year while doing absolutely nothing to earn it? Of course they could. It would take genuinely spectacular financial incompetence not to.
My own family has lived happily on considerably less than $460,000 a year since our son was born in 2017. Even after our daughter arrived and both kids enrolled in independent language immersion school costing $90,000 a year combined after tax, we don’t need anywhere near $460,000.
We could live well on $100,000 less and not feel deprived for a single day. That’s still $30,000 a month.
A Realistic Budget For A FIRE Family Of Four
To make this concrete, here’s a realistic annual budget I put together for a FIRE family of four living in an expensive coastal city on $360,000 in passive investment income. That’s a 3.6% safe withdrawal rate on $10 million in investable assets, which is reasonable. Many people who have retired early remain reluctant to withdraw even at a 4% or 5% rate, so they can have a larger buffer.
The two biggest line items are $88,000 in private grade school tuition for two kids and $32,000 in unsubsidized health insurance. Yes, those numbers sting. But even with those costs baked in, the math works.
The home is paid off, as it should be for anyone serious about early retirement. There’s room for vacations, charity, and a comfortable life. If things got tight, you could trim all three and find more affordable schooling. Public schools are just fine.
The point is, if you’re generating $360,000 a year from passive investments and never have to show up to an office to earn it, your life is objectively good. And if you ever needed more, you could do some consulting, pick up part-time work, or monetize a hobby. The options don’t disappear just because you stopped working full-time.
Thankfully, at today’s risk-free rate of return, $10 million can generate $100,000 more than $360,000. That’s an extra ~$70,000 after taxes to do as you wish. That’s not scraping by. That’s thriving!
The Real Problem Is The Desire For More
So why can’t I convince a single person in real life to actually FIRE?
It’s not the math. The math is easy once you do it. Once again, it’s the desire for more, and more specifically, the desire to keep up with the people around them.
When you live in cities like San Francisco or New York, your peer group consists of tech executives, successful founders, and finance professionals, warping your baseline for “normal.” The houses get bigger. The cars get nicer. The private school waitlists get more competitive. And suddenly $10 million starts to feel inadequate because you’re comparing yourself to people worth more.
Lifestyle inflation is insidious because it doesn’t feel like inflation. It just feels like progress. It feels like you’re finally living the way you’ve always deserved to live. And by the time you realize the goalposts have moved again, you’re committed to a lifestyle that requires you to keep working.
Reaching $10 Million Should Feel Like Winning
Reaching a $10 million net worth puts you almost in the top 1% of American households. The threshold for the top 1% is somewhere between $11 and $13 million depending on the source, so $10 million gets you close.
And yet people with $10 million are still telling themselves it’s not enough. Meanwhile, people without $10 million are nodding along in agreement. Everyone loses.
Once you reach $10 million, especially if the bulk of it is in investable assets rather than tied up in your primary residence, you no longer need to grind. In bull market years with double-digit percentage returns, the money starts working harder than you ever could.
Your $10 Million Will Likely Continue To Grow
And here’s another thing. Even if you withdraw at 4%, your net worth will likely continue to grow given historical returns are greater. In 10 years, at an 8% annual return, your $10 million would turn into roughly $21.6 million — more than double — even after withdrawing $400,000 a year the entire time.
So if you’re fortunate enough to reach that level, give yourself permission to enjoy it. FIRE doesn’t mean doing nothing. It means having the freedom to choose what you do with your time. That is the whole point.
And if $10 million feels out of reach right now, that’s fine too. You can retire on far less with the right budget and the right mindset. Most people already could. They just haven’t done the math.
Do the math.
Readers, why do you think people with less than $10 million believe it’s still not enough to retire early? Have we been so thoroughly brainwashed that a top 2% net worth feels inadequate? And how much of that dissatisfaction comes down to constantly comparing ourselves to the people one rung above us on the wealth ladder?
For background, I retired in 2012 with about $3 million in net worth, equivalent to roughly $5 million today after adjusting for inflation. At the time it felt like more than enough, and it turned out to be, largely thanks to investment growth and supplemental retirement income I earned along the way. What I can tell you from 14 years of experience is this: you will adjust. Financial needs and circumstances change, and you will change with them.
Know Exactly Where You Stand Financially
If you’re debating whether $10 million is enough to retire, the first step is knowing precisely what you actually have. Sign up for Empower, my favorite free financial tool. I ran my 401(k) through its investment analyzer and discovered I was quietly paying thousands a year in unnecessary fees on active funds.
I switched most of the portfolio to ETFs and have saved over $50,000 in fees since. If you’re grinding away at a job you dislike while bleeding money in hidden fees, that’s a painful combination you can fix today for free.
This is also the last month I’ll be sending signed copies of my USA Today bestseller, Millionaire Milestones. If you’d like a copy, sign up for a free financial review with Empower after linking over $100,000 in investable assets. Full details and instructions are in this post.
